NOTICE of AMENDMENT TO BOND DOCUMENTS

Transcription

1 NOTICE of AMENDMENT TO BOND DOCUMENTS January 9, 2013 To the Holders of: PORT AUTHORITY OF COLUMBIANA COUNTY, OHIO $37,500,000 Solid Waste Facility Revenue Bonds (Apex Environmental, LLC Project), Series 2004 A (the Apex 2004 A Bonds ) CUSIP * : AC AD0 $3,300,000 Solid Waste Facility Revenue Bonds (Apex Environmental, LLC Project), Taxable Series 2004 B (the Apex 2004 B Bonds ) CUSIP * : AE8 $2,000,000 Subordinate Solid Waste Facility Revenue Bonds (Apex Environmental, LLC Project), Series 2004 C (the Apex 2004 C Bonds ) CUSIP * : AG3 $19,000,000 Solid Waste Facility Revenue Bonds (Liberty Waste Transportation, LLC Project), Series 2004 A (the ELST 2004 A Bonds ) CUSIP * : AF5 The Apex 2004 A Bonds, Apex 2004 B Bonds, and Apex 2004 C Bonds (collectively, the Apex Bonds ), were issued pursuant to the Indenture of Trust (the Apex Indenture ), between the Port Authority for Columbiana County, Ohio, as issuer (the Issuer ) and Wells Fargo Bank, N.A. (the Apex Trustee ), dated as of December 1, Pursuant to that certain Loan Agreement dated as of December 1, 2004, as amended from time to time (the Apex Loan Agreement ) between the Issuer and Apex Environmental, LLC (the Apex ), the Issuer made the proceeds of the Apex Bonds available to Apex and Apex agreed to repay such proceeds on the terms and conditions set forth therein. The ELST 2004 A Bonds (together with the Apex Bonds, the Bonds ) were issued pursuant to the Indenture of Trust (the ELST Indenture, and * No representation is made as to the accuracy of the CUSIP numbers contained in this letter, although a good faith effort has been made to insure that CUSIP numbers are correct.

2 together with the Apex Indenture, the Indentures ), between the Port Authority for Columbiana County, Ohio, as issuer (the Issuer ) and Wells Fargo Bank, N.A. (the ELST Trustee, and together with the Apex Trustee, in such capacities, the Trustee ), dated as of December 1, Pursuant to that certain Loan Agreement dated as of December 1, 2004, as amended from time to time (the ELST Loan Agreement, and together with the Apex Loan Agreement, the Loan Agreements ) between the Issuer and ELS Transportation, LLC (formerly known as Liberty Waste Transportation, LLC) ( ELST, and together with Apex, the Companies ), the Issuer made the proceeds of the ELST 2004 A Bonds available to ELST and ELST agreed to repay such proceeds on the terms and conditions set forth therein. The Interim Facility On July 2, 2012, at the direction of the owners of a majority of the aggregate principal amount of the Bonds, the Trustee entered into a Third Amendment to Conditional Waiver and Modification Agreement (the Waiver Agreement ) with the Companies. The Waiver Agreement, among other things, permitted the Companies to request draws under a certain Credit and Security Agreement, by and among the Companies and certain of their affiliates, and ELS Lender LLC, as agent for the lenders party thereto (the Lenders ), pursuant to which the Lenders agreed to make available on the terms and conditions stated therein a revolving credit facility in the amount of $3.5 million (the Interim Credit Facility ). The Waiver Agreement contemplated that the Trustee, the Companies and the Lenders would enter into, and the parties did enter into, an Intercreditor Agreement (the Interim Intercreditor Agreement ), pursuant to which the rights of the Trustee and the Lenders in collateral pledged by the Companies were established. To secure advances under the Interim Credit Facility, the Company granted in favor of the Lenders a security interest in (i) certain accounts receivable generated as a result of the financing made available under the Interim Credit Revolver Facility, (ii) certain oil, gas, and mineral rights with respect to the Landfill and related real property, as well as any contracts and related contract payment rights with respect to the development and exploitation of such oil, gas, and mineral rights (the Shale Development ), and (iii) certain cash management accounts of the Companies (the Cash Accounts ). In connection with these transactions, the Companies granted in favor of the Trustees a security interest in the Cash Accounts and a second priority security interest in the assets of Sajo Transport, Inc., an affiliate of the Companies. In connection with the Interim Credit Facility and the Interim Intercreditor Agreement, the Trustee, at the direction of the owners of a majority of the aggregate principal amount of the Bonds, the Company and the Lenders agreed to the provisions of a term sheet, that, inter alia, was intended to set forth the understanding of the parties concerning a longer term solution of the issues facing the Company. The New Revolver Facility On December 10, 2012, the Company and the Lenders entered into a new revolving credit facility in the amount of $15 million, inclusive of the amounts outstanding under the Interim Credit Facility, which funds can be drawn over time to support the operations and working capital needs, capital expenditures and general corporate purposes of the Company and certain of its affiliates (the New Revolver Facility ). The New Revolver Facility will mature on October 1, The New Revolver Facility is accompanied by a new intercreditor agreement, which replaces the Interim Intercreditor Agreement (the Amended Intercreditor Agreement ). In connection with the issuance of the New Revolver Facility, certain amendments to the Bonds and related documents were

3 made as described below under the heading Amended Bonds. To secure advances under the New Revolver Facility, the Company granted in favor of the Lenders a security interest in (i) all accounts receivable, on a pari passu basis with the Trustee s security interest in these receivables, provided that the Lenders have a priority position with respect to certain accounts receivable generated as a result of the financing made available under the New Revolver Facility, (ii) certain gases resulting from the anaerobic biological decomposition of landfilled solid waste and the proceeds therefrom (the High BTU Project ), and (iii) the collateral described with respect to the Interim Credit Facility. As supplemental credit support for the Bonds (i) New Jersey Transloading, LLC, New Jersey Rail Carrier Limited Liability Corporation and ELS-2 LLC granted in favor of the Trustee for the benefit of the Bondholders a first priority perfected security interest in all of their respective assets, (ii) Environmental Logistics Services LLC ( ELS ) granted in favor of the Trustee for the benefit of the Bondholders a second priority perfected security interest in all of its assets and a first priority perfected security interest in the equity interests of ELS in each of Apex and ELST, and (iii) New York Rail Logistics LLC granted in favor of the Trustee for the benefit of the Bondholders a second priority perfected security interest in all of its assets. Amended Bonds In connection with the issuance of the New Revolver Facility and the Amended Intercreditor Agreement, each of the Apex Indenture and the ELST Indenture (respectively, the Amended Apex Indenture and the Amended ELST Indenture, and together the Amended Indentures ) and the Apex Loan Agreement and ELST Loan Agreement (respectively, the Amended Apex Loan Agreement and the Amended ELST Loan Agreement, and together the Amended Loan Agreements ) were amended and restated as of December 10, 2012 pursuant to their terms and upon receipt of opinions of counsel. Pursuant to the terms of the Amended Indentures, on or prior to September 30, 2014, so long as there is no Termination Event (as defined in the Amended Intercreditor Agreement), holders of the Apex 2004 A Bonds and the ESLT 2004 A Bonds, agreed to a redemption price of par less a discount (the Applicable Bond Discount ) of such Bonds equal to $6,061, with respect to the Apex 2004 A Bonds and $3,938,577.58, with respect to the ELST 2004 A Bonds, provided that in the event that a definitive purchase agreement for the sale of all or a material part of the Company, as applicable, is executed on or before December 31, 2013 and such purchase agreement provides for the redemption of all of the applicable Apex 2004 A Bonds or ELST 2004 A Bonds upon the closing thereof, or requires mandatory redemption in part pursuant to the sale of any Obligor (as defined in the Intercreditor Agreement) or any direct equity interest in an Obligor, then the amount is adjusted to $6,667, with respect to the Apex 2004 A Bonds and $4,332, with respect to the ELST 2004 A Bonds; provided further that in the event of any permanent reduction of the New Revolver Facility on account of proceeds of the Shale Development (as defined in the Amended Intercreditor Agreement) such amount is reduced by % of the permanent reduction of the New Revolver Facility. The Applicable Bond Discount shall be $0.00 with respect to (i) any partial redemption of the Apex 2004 A Bonds or ELST 2004 A Bonds, as applicable, except in the event of a mandatory redemption pursuant to the sale of any or any direct equity interest in an Obligor as provided in the Amended Indentures, (ii) any redemption after October 1, 2014, or (iii) upon the occurrence and continuation of a Trigger Event as defined in the Amended Intercreditor Agreement. The Apex 2004 A Bonds and ELST 2004 A Bonds (together, the 2004 A Bonds ) are subject to special mandatory redemption upon the Trustee s receipt of certain funds from the proceeds of the sale of any Obligor or any direct equity interest in an Obligor pursuant to the Intercreditor Agreement that results in less than full payment of all Bonds (less the Applicable Bond Discount, if any) unless certain

4 requirements of the buyer are satisfied. Such proceeds would be applied to the redemption of the applicable 2004 A Bonds in an aggregate principal amount, less the Applicable Bond Discount, if any, proportionate to the aggregate principal amount then outstanding under the applicable Apex 2004 A Bonds or ELST 2004 A Bonds, as applicable, and the aggregate principal amount then outstanding under the 2004 A Bonds. The Amended Indentures establish a Forbearance Period commencing on December 10, 2012 through and including the first to occur of (i) September 1, 2014, and (ii) a Termination Event under the Amended Intercreditor Agreement (the Forbearance Period ). During the Forbearance Period, the Companies are not required to deposit any Revenues or make any payments under the Amended Loan Agreements or Amended Indentures, other than fees and expenses of the Trustee pursuant to the Amended Intercreditor Agreement. Under the Amended Loan Agreement such Revenues are to be used for Permitted Purposes as defined in the Intercreditor Agreement. During the Forbearance Period, to the extent funds are insufficient to pay, in cash, interest due and payable on the applicable 2004 A Bonds, such unpaid amount (rounded to the nearest whole dollar) is to be added to the principal amount of a new Series 2012 D Bonds, with respect to the Apex 2004 A Bonds, and to a new Series 2012 B Bonds, with respect to the ELST 2004 A Bonds, each to be issued under the applicable Amended Indenture. Any amount of accrued but unpaid interest on the applicable 2004 A Bonds when added to the principal amount of the Series 2012 D Bonds or Series 2012 B Bonds, as applicable, shall be deemed paid and shall cease to be due and payable on the applicable 2004 A Bonds. The amount of any increase to the principal amount of the Series 2012 D Bonds or Series 2012 B Bonds shall be allocated among the holders of the Series 2012 D Bonds or Series 2012 B Bonds by the Trustee ratably based on the Outstanding principal amount of Apex 2004 A Bonds and ELST 2004 A Bonds, respectively, owned by each Owner immediately prior to such allocation. The Series 2012 D Bonds and Series 2012 B Bonds (together, the 2012 Bonds ) will be issued under the respective Amended Indentures in the aggregate principal amount equal to the amount of interest (rounded to the nearest whole dollar), from time to time during the Forbearance Period, accrued but unpaid on the applicable 2004 A Bonds in order to provide for the payment of interest in kind on such 2004 A Bonds plus the amount of interest (rounded to the nearest whole dollar) accrued during the Forbearance Period on such 2012 Bonds. The Series 2012 D Bonds will be initially dated February 1, 2013 and will bear interest payable upon the earlier redemption in full of the Series 2004 A Bonds or the maturity of the Series 2004 A Bonds. Interest on the Series 2012 D Bonds shall be computed on the basis of a 360-day year consisting of twelve 30-day months. The Series 2012 D Bonds mature on August 1 in the years and shall bear interest at the rates per annum set forth below: Year Rate % % The Series 2012 B Bonds mature on December 31, 2017 and shall bear interest at the rate of % per annum. The 2012 Bonds are subject to special mandatory redemption upon any redemption of the applicable 2004 A Bonds, in the same ratio of applicable 2004 A Bonds being redeemed to the aggregate principal amount of applicable 2004 A Bonds then Outstanding. The 2012 Bonds are also subject to

5 optional redemption at the election of the applicable Company at any time at par. Pursuant to the Amended ELST Indenture, the ELST 2004 A Bonds are subject to redemption prior to maturity at a Redemption Price equal to the principal amount thereof, plus accrued interest, by application by the Trustee of funds on deposit to the credit of the Bond Fund on the dates and in the principal amounts as follows: Date Principal Amount August 1, ,300,000 August 1, ,390,000 August 1, ,485,000 December 31, ,445,000 The Amended Apex Indenture does not modify the terms and provisions of the Apex 2004 B Bonds or the Apex 2004 C Bonds. The Apex 2004 A Bonds, the Apex 2004 B Bonds, and Series 2012 D Bonds constitute the Senior Bonds under the Amended Apex Indenture. The Senior Bonds are secured by, among other things, funds held in the Debt Service Reserve Fund, a Mortgage and Security Agreement dated as of December 1, 2004, as amended, by Apex to the Apex Trustee and a Security Agreement, dated as of December 1, 2004, as amended, by Apex to the Apex Trustee. The Apex 2004 C Bonds are subordinated as to right to payment to the rights of the Senior Bonds and are not secured by any property or collateral other than the right to be paid principal and interest from moneys, if any, available to make such payments in the Series 2004 C Bond fund. Fund Balances As of the date of this Notice the Apex Trustee is holding the following amounts for the holders of the applicable Apex Bonds: 2004 Series A Debt Service Reserve Fund $3,287, Series B Debt Service Reserve Fund 162, $3,450, As of the date of this Notice the ELST Trustee is holding the following amounts for the holders of the ELST Bonds: Debt Service Reserve Fund $1,388, Issuer Fee Fund 3, $1,391, Holders of the Bonds should contact Wells Fargo for further information or any other matters concerning the Bonds, or the trust estate to be administered by Wells Fargo as trustee, at the following address: Wells Fargo Bank, N.A. Corporate, Escrow, and Municipal Solutions

6 230 W. Monroe St., Suite 2900 MAC N Chicago, IL 6060 Attention: Scott Hagwell, Vice President Phone: If any beneficial holder of the Bonds wishes to receive information from Wells Fargo directly, instead of through its broker or clearing house, please contact Wells Fargo at the above address or by to be added to Wells Fargo s notification system concerning the Bonds. January 9, 2012 WELLS FARGO BANK, NATIONAL ASSOCIATION, as Trustee v.3